Chattanooga, Tn city government fiber project a success February 22, 2012

EPB revealed on Friday that it has surpassed 35,000 fiber-optic customers in the Chattanooga area, leaping ahead of initial projections of 26,000 users by the third year. The 59-employee fiber-optic division brought in $57.3 million in its third year, according to the company’s 2011 report.

If the city-owned utility continues to make money and pay down its debt, it will become the most successful government-owned network after cities such as Chicago, Philadelphia and Marietta, Ga., gave up their similar efforts. At the current rate, EPB can shave seven years off the time it will take to pay off its telecom debt, becoming virtually debt-free by 2020 instead of 2027 as projected.

Even so, the government utility still is spending money to sign up new customers, a process that will increase debt until 2013. The utility has $51 million in total debt so far, but it only needs 30,000 customers to break even on operational costs.

EPB won’t speculate about when EPB could earn enough to offset the taxpayer dollars that helped fund the Smart Grid, but the utility already is finding new sources of revenue.

A new advertising program brought in $30,000 in January, and is projected to show $360,000 in ad revenue for the year. The main driver of cost is the cost of video content, which will have to be offset.

It appears on the surface that one city utility is doing broadband right, for both the city and its residents. It’s a shame more small cities don’t jump on the band wagon and learn something from this.